International Bank v. Bartalott

McAllister, J. It is well settled and familiar law, that the action for money had and received to the use of the plaintiff will lie, to recover back money paid by him, under mistake of a material fact; that is, under mistake of such fact, as would, in the absence of such mistake, have rendered him liable to pay the money or subjected him to the necessity of paying it, in order to relieve his property from an incumbrance. Chitty on Contracts, 10th Am. Ed. 694, and cases in notes. Marriot v. Hampton, 2 Smith’s Lead. Cas. * 400, et seq. |HIf, therefore, the plaintiff paid to defendant the sum of , fifteen thousand dollars, as and for a balance due upon Walker’s two notes of fifteen thousand dollars each, and they had been secured by a mortgage held by defendant, which was an apparent incumbrance upon the real estate which plaintiff had purchased of Walker; if, before the time of such payment by the plaintiff, said Walker had, in fact, paid off said ■ indebtedness upon said notes, to the defendant, so that at the time the plaintiff paid said fifteen thousand dollars to defendant as aforesaid, no part of Walker’s indebtedness upon said notes remained unpaid; and if the plaintiff, at the time he so paid said fifteen thousand dollars to defendant, had no knowledge of the fact of such previous payment by said Walker, but made such payment under a real mistake, as to the fact of such previous payment by said Walker for the purpose of freeing his premises from a supposed incumbrance, without any laches on his part, or any intention to waive all inquiry into the truth of the matter of the amount actually due to the defendant, then, upon the making such payment by the plaintiff, under the circumstances aforesaid, a cause of action accrued to him and he had an immediate right of action against defendant, to recover back the amount so paid as so much money received by the defendant, to the plaintiff’s use. .Before we speak of the instructions for plaintiff, whose correctness is challenged bv defendant’s counsel, we must develop another aspect of the case, although the evidence below tended to support each of the above hypotheses. The payment of the fifteen thousand dollars, by the plaintiff is an undisputed fact in the case; there was evidence tending to show, that at the time it was made, there was nothing due to defendant in respect of the Walker notes; that plaintiff made the payment under an actual mistake as to the fact of the Walker debt having been previously paid; and that no laches was imputable to him. But a cause of action accrued to plaintiff immediately upon his making the payment under such circumstances, and that was April 6, 1874. This suit was not brought until October 17, 1881, and was after the lapse of five years from the accruing of the cause of action. Prima facie, therefore, the right of action was barred by the statute of limitations, which was pleaded. To avoid the bar of the statute, it was incumbent on the plaintiff, to set up by way of replication, to that plea, facts and circumstances sliow- • ing that the defendant corporation, through some of its managing officers or agents, having authority to act in the premises had, with the fraudulent design of concealing from the plaintiff the fact of such previous payment by said Walker of the indebtedness upon said notes, resorted to, and used some false representations, or some trick or artifice calculated to and which did have the effect of concealing such fact from plaintiff (notwithstanding the exercise, on his part, of diligence, reasonable and proper, in view of all the circumstances) for and during such period of time as will bring the time of the commencement of this suit within five years from the time when plaintiff discovered such fact; the replication also setting forth when and how such discovery was made. We are of opinion that the replication in this case is substantially wanting in the above requisites, and that it can be only regarded as tendering an immaterial issue. We are also of opinion that each of the instructions, given on behalf of plaintiff, is radically wrong. By the first, the court improperly assumes the vital fact in controversy, as to the original cause of action, viz.: the previous payment and cancellation of the two notes in question. By it the court directs a verdict for the plaintiff solely upon the hypothesis that plaintiff was induced to pay the money through the fraudulent misrepresentations of the president of the defendant corporation, and diligent inquiry on the part of the plaintiff, as to the true state of facts; wholly ignoring the defense of the statute of limitations. The second instruction has the same defect. It directs a verdict for plaintiff, irrespective of any questions arising upon the plea of the statute of limitations, and upon the sole hypothesis that a fraud was practiced upon the plaintiff by the defendant, through which the plaintiff was wrongfully induced to pay money to the defendant. The only money defendant ever received of plaintiff, so far as the case shows, was April 6, 1874. This suit was not begun until October 17, 1881. The plea of the statute of limitations was, therefore, sustained, unless it was avoided by the fraudulent concealment by defendant of the cause of action, as above stated. By the third instruction, the court submits it to the jury to determine the rather difficult question of law, whether the plaintiff originally had a cause of .action against the defendant. That these were all material and prejudicial errors, there can be no doubt. Other points for reversal are made, but which we do not deem it necessary to consider; for those pointed out, the judgment will be reversed and the cause remanded. Judgment reversed.